Talks over the transfer of CPP management to Riau stalled

Negotiations between the Riau provincial administration and state-owned oil company over the operation of Coastal Plain Pekanbaru oil block have come to a total deadlock as both parties failed to settle their differences over the ownership of a joint venture that would manage the oil block, Riau Pos reported on Wednesday.

Riau governor H. Saleh Djasit said on Tuesday that the percentage of shares, which would be allotted to the provincial administration and Pertamina, remained the standing block of the negotiations.

The Riau administration insisted to have at least a 70 percent stake and gave another 30 percent to Pertamina but the later refused the arrangement and instead offered a 51 and 49 percent split in favor of the provincial authority.

The government agreed early this year to meet the Riau administration's demand to take over the operation of the oil block after the current contract, which is currently operated by PT Caltex Pacific Indonesia, expires in August next year.

However, the ministry of energy and mineral resources will not issue its final approval until the provincial administration finds its partners in managing the oil block.

The province agreed to follow the government's advice to involve Pertamina, as its partners in operating the CPP oil block but negotiations on the establishment of a joint venture to manage the oil block did not run as expected.

The governor said that the planned a high-level meeting involving President, Vice President, Minister of Energy and Mineral Resources, Coordinating Minister for Social Affairs and Security, Homes Affairs Minister and Pertamina president, Riau administration could not be held due to "miss communication."

"There was a miss communication so we could not hold the meeting right now," the governor said. (*)